TMI Blog1979 (1) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... r s. 15C of the Indian I.T. Act, 1922. The ITO rejected this claim on the ground that the new industrial undertaking was formed by transfer to the new business of buildings which were used in any other business. In appeal the order of the ITO was set aside by the AAC and, therefore, the revenue challenged the order of the AAC before the Income-tax Appellate Tribunal. The Tribunal took the view that two requirements had to be satisfied before an assessee could claim partial exemption under s. 15C of the Act. The first requirement, according to the Tribunal, was that the building used by the assessee had to be shown to have been previously used by the assessee himself. The other requirement, according to the Tribunal, was that the building ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Services Pvt. Ltd. v. CIT [1973] 91 ITR 566 (Bom). In order to avail of the exemption provided for under s. 15C(1), one of the conditions which has to be satisfied is the one prescribed in cl. (i) of sub-s. (2) of s. 15C which refers to the industrial undertaking to which s. 15C applies and the relevant part thereof reads as follows : " (2) This section applies to any industrial undertaking which- (i) is not formed by the splitting up, or the reconstruction of, business already in existence or by the transfer to a new business of building, machinery or plant previously used in any other business." We are not concerned with the first part of clause (i) in this case. The Tribunal has taken the view that the building of which a trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person carrying on the new business. In view of this authoritative pronouncement of this court, it must be held that the view taken by the Tribunal that the transfer of the building must be of the building used by the assessee and that the lease was not covered by the word " transfer " was clearly erroneous in law. Mr, Mehta appearing on behalf of the assessee, however, contended that having regard to the fact that the interest transferred in the form of a lease was so insignificant as compared with the other assets of the company that the assessee could not be deprived of the benefit of the provisions of s. 15C(1) of the Indian I.T. Act, 1922. Obviously this contention is founded on the view taken in a decision of this court in CIT v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g refers to a building previously used by the assessee himself in any other business and not to a building earlier used for business by a stranger ? (2) Whether, on the facts and in the circumstances of the case, the lease taken by the assessee of the portion of the Bank of Baroda building and portion of the Laxmi Woollen Mills Estate for setting up its factory amounted to transfer to the assessee-company within the meaning of the words " transfer to a. new business of building previously used in any other business " occurring in section 15C(2)(i) ? " Having regard to the discussion made earlier, we answer the questions reframed as follows : Question No. 1 : For the purposes of s. 15C(2)(i) of the Indian I.T. Act, 1922, it is not ne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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